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Hatchets and Bones

March 5, 2020

Although the 18th President, working with the 43rd Congress, tried to reform the New York Customhouse, the 19th President sought further reforms.  Whereas in 1874 President Grant signed legislation to end the moiety system, in 1877 President Hayes asked his Treasury Secretary to more thoroughly investigate the Customhouse.  This time they discovered a tremendous amount of inefficiency and downright corruption.

The Customhouse had many more employees than necessary.  Various witnesses testified that staff could easily be cut by 10 to 20 percent with no diminution of services.  One of the assistant collectors actually had nothing to do.

Many of the workers had been hired for political reasons.  One witness testified that “men are frequently sent to me without brains enough to do the work.”  Another reported gross mislabeling of invoice items.  There were many cases of laziness.  Some were even moonlighting as notaries public during business hours!

Among the corrupt activities was the practice of receiving “hatchets” and “bones.”  A “hatchet” was money received by inspectors from merchants who wanted special treatment for their imports.  “Bones” were bribes paid by passengers so their baggage wasn’t inspected.  By these devices many goods entered the country duty free.

Despite these and other irregularities President Hayes did not remove Chester Arthur from the Collectorship.  Instead, he imposed new standards that Arthur was to implement at the Customhouse.  On June 22, 1877, just 110 days into his Presidency, Hayes issued an Executive Order barring Federal employees from participating in political activities and preventing the termination of employees for political reasons.

By the end of summer this action by President Hayes would become a big problem for Chester Arthur.






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